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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade
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To: Dan Duchardt who wrote (2049)2/12/2000 10:41:00 AM
From: Wayners  Read Replies (2) of 2120
 
There is a very real possibility that in a cash account daytrading is "illegal"

I would like to know more about this. Is this based on T+3 settlement and that margin is required in order to get spend the proceeds of a transaction from a daytrade? I see you're point thinking about it from that standpoint. I think that you would be able to buy and sell in the same day still---but you couldn't do another day trade using that money for several days. I currently don't like the margin requirements that go with overnite holds. Doesn't make sense that I can receive proceeds from a daytrade intraday and use that money again to buy something else (requires borrowing because the actual cash doesn't arrive for 3 days), but if I hold a stock overnite and sell it--then I cannot use those proceeds until the next day. This difference occurs simply because nobody is doing intraday equity/margin calculations. With today's technology, these calculations could and should be carried out intraday and instantaneously and thus the overnite margin rules could be eliminated.

It also makes no sense to even have T+3 settlements.
Options clear in T+1. Why do stocks take longer than options?
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